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PRODUCT.|PHILOSOPHY.|LIFE.

Choosing what to optimize for

One of the biggest challenges that companies face today is to drive employees to take ownership of overall company metrics like the revenue, profits and active customers / users while at the same time tasking them with responsibility for a highly focused area like the functionality of a search box or acquisition of new customers.

Every company tries to achieve this, but only a handful (if any) succeed. And the bigger a company gets, the harder it is to succeed in achieving this balance.

When there are tens or hundreds of teams in a company, it becomes very hard to discern and attribute the impact that each of these teams has on the overall company metrics. Hence, the teams start looking for proxies that can help evaluate their impact on the company. And naturally, when that happens, these teams will start optimizing for this proxy metric and lose sight of the overall metric.

When teams focus on different aspects of the product or the business, their local optimizations can come in conflict and make no impact on the overall company metrics. Or worse yet, they could have a negative impact. For instance, a team tasked with reducing spend on customer care might over-burden their customer care agents which results in lower customer satisfaction which results in customers leaving to other alternatives. While the team succeeds in reducing the spend on customer care in this case, the company as a whole loses as some customers begin to go elsewhere.

In our daily lives, we find it hard to hit a similar balance between local optimizations and global optimizations that bring us value in the longer term.

I am especially prone to falling into such a trap as I am more meticulous than the normal person when it comes to planning out my days and weeks. I could end up striving for optimizing for local metrics of hitting inbox zero or being on top of my news feed or returning all the calls and messages I get, and lose sight of the long term impact this would have.

While I've been more conscious of this in planning my weeks and account for such biases, I still have room for improvement when it comes to striking the right balance.

But, the most common issue that everyone runs into while trying to strike this balance is with email, messages and social media.

Of course, many of the people that contribute to the Facebook's majority user base that spends more than an hour a day on their properties - Messenger, Facebook, WhatsApp, Instagram - don't even realize that they are optimizing for a local metric that is negative for them as individuals in the longer term metrics like their health, finances and knowledge levels. Just like most teams in most companies don't realize that the actions they are taking to optimize for their localized metrics might be hurting the more important metrics for the company.

There is no easy way out of this. The first step lies in understanding the situation and identifying the need for a balance. From this awareness will come the answers.

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